The Grey Chronicles

2008.September.9

Recommendations for Future NSC


Claessens and Henderson (2007) noted, “A wave of consolidation is sweeping the industry, but other industry wide changes are also unfolding, such as a shift away from developed countries, rising production costs and globalization”. They recommended, “. . . each steel company should revisit its market position and aim for one of strength.”

Thus, for any reincarnation of NSC, not just GSPI—the latter is only used as the base case scenario—a need to analyze its strength (S) and weaknesses (W), explore its opportunities (O) and threats (T), to come up with strategies affecting flat production. The top five (5) issues, most are interconnected, of each of the four (4) parameters of the SWOT/TOWS matrix, summarized in Appendix T: SWOT/TOWS Matrix, are enumerated below.

Strengths (S): NSC’s strength came from its well-trained professional technical and managerial personnel; adherence to world- class standards and production methods; comparable “state-of-the-art” high-tech facilities and equipment; favorable customers’ reception; and its proximity to ASEAN and Asian markets. more . . .

Weaknesses (W): Some NSC’s weakness remained with GSPI’s taking over specifically, its dependence on imported raw materials and the outdated NSC’s business networks and e-commerce. Moreover, based on the four-year GSPI’s management of NSC facilities, new threats are emerging, e.g., lack luster remuneration scheme versus global standards; perceived instability at the top, insecurity at the bottom; and weak marketing of products to domestic markets. more . . .

Opportunities (O): Emerging markets are considered here both as a threat and as opportunity, but rather than present a gloomy outlook, this study proposes to positively deal with it as an opportunity. Other opportunities abound. The recapture of the Philippine domestic steel market with government’s support of the steel industry as stipulated in the Medium-Term Philippine Development Plan for 2004-2010. The quest for Special Economic Zone status for GSPI is beckoning. The realization of the Japan-Philippine Economic Partnership Agreement (JPEPA) in January 2008 and the proposed implementation of the ASEAN Community by 2010, and the new production technologies, processes and methods. more . . .

Threats (T): These factors include the political and legal environment affecting the nation as a whole, thus affecting the steel industry. Although not discussed here at length, its repercussions are noted. Other threats include the unbundling of the power rates and the worsening power supply in Mindanao; the constantly decreasing import tariffs vis-à-vis the increased volume of steel importation; the rising “brain drain” syndrome; and the challenges of keeping the natural environment safe from pollution. more . . .


Notes:

Claessens, Dirk and Allan Henderson (2007), “Seize the strong positions. Steel companies in an era of consolidation.” NY, USA: IBM Global Services, IBM Institute for Business Value, June 2007. pp. 1-20. back to text

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 LicenseDisclaimer: The posts on this site do not necessarily represent any organization’s positions, strategies or opinions; and unless otherwise expressly stated, are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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